cci building wa's workforce for tomorrow (final) june 2010
TRANSCRIPT
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June 2010
Prepared by the Chamber of Commerce and Industry Western Australia
ne 2010J
Building Western AustraliasWorkforce for TomorrowDiscussion Paper
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Contents
About CCI ................................................................................................................................................ 2
Context .................................................................................................................................................... 2
Executive Summary ............................................................................................................................... 3
Recommendations .............................................................................................................................. 5
Economic Context .................................................................................................................................. 8
Labour Force Projections ................................................................................................................... 9
A Human Capital Strategy for WA ....................................................................................................... 12
Building the States Population ......................................................................................................... 12
Migration Policy Framework ....................................................................................................... 14Planning for Population Growth .................................................................................................. 16
Raising Workforce Participation ....................................................................................................... 19
Women........................................................................................................................................ 21
People with Disability .................................................................................................................. 22
Indigenous Australians ................................................................................................................ 24
Older Aged Australians ............................................................................................................... 25
Improving Productivity ....................................................................................................................... 26
Industrial Relations .................................................................................................................... 26
Education Reforms ..................................................................................................................... 28
References ............................................................................................................................................ 30
Endnotes ............................................................................................................................................... 32
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About CCI
The Chamber of Commerce and Industry Western Australia (CCI) is the leading business association in Western
Australia.
It is the second largest organisation of its kind in Australia, with a membership of over 5,500 organisations in all
sectors including manufacturing, resources, agriculture, transport, communications, retailing, hospitality, building
and construction, community services and finance.
Most members are private businesses, but CCI also has representation in the not for-profit sector and the government
sector. About 80 per cent of members are small businesses, and members are located in all geographical regions
of WA.
Context
Australia has been a highly successful and wealthy nation, in large part due to its skilled and productive workforce.
However, with an ageing population, low fertility rates and increasing international competition, it is critical that
appropriate policies be implemented if Australia is to have a workforce that is capable of ensuring the nations
continued economic success.
While Australia faces challenges, the difficulties for Western Australia are even more pronounced given the wealth
of opportunities which lie ahead for the state, and its relatively smaller workforce.
The extent of the states labour force challenges has been illustrated in recent times. During the period of rapid
growth and development last decade, labour shortages emerged as a significant challenge, with around three quarters
of WA businesses consistently struggling to find suitable workers. Importantly, such constraints were not confined
to the booming mining and construction sectors, but have been widespread across all industry sectors, all regions
and businesses both big and small.
While the global economic downturn did have a significant impact on businesses, it provided some short term relief
from labour shortages. However, with an economic recovery now underway, signs continue to emerge that WA will
once again be faced with the chronic labour shortages which have plagued the state in recent times. Given that WA is
expected to return to the rapid r ates of growth that were the norm last decade, this will require a significant increase
in the number of workers in the state to facilitate this expansion.
In this regard, it is imperative that a human capital strategy be developed, which will help increase the size of the
workforce, and improve the productivity of the current workforce.
This discussion paper builds upon CCIsBuilding Human Capital discussion paper, which was released in November
2007. The paper provides further detail about the extent of the labour force challenges which are facing the state,and sets out a proactive policy agenda to ensure that WA can meet its workforce needs.
Executive Summary
Over the last decade, the WA economy experienced a period of economic growth unlike any other in the states
history, courtesy of the unprecedented demand from China for our natural resources. This saw the local economy
double in size, almost 200,000 jobs created and record numbers of people move t o the state to share in the positive
conditions.
While this period of strong growth has created much wealth for the state, it also brought about a range of challenges.
The most pressing challenge was the extremely tight labour market conditions, which resulted in the emergence of
severe and widespread labour shortages.
Although the global financial crisis and associated downturn provided some relief to local businesses from this chronic
issue, this is expected to be short lived. The WA economy is now firmly on the path to recovery, with economic
growth soon expected to return to the high levels seen prior to the global financial crisis. This next wave of growth
and prosperity for the state will be underpinned by the resurgence in the global economy, with the rapid growth in
developing nations expected to drive strong growth in WA for many years to come.
With this return to strong growth and prosperity, the states labour market is also expected to see the extremely tight
conditions resurface, as businesses gear up for the next wave of activity.
A significant increase in the states workforce will be required to facilitate this expansion. CCI estimates an
additional 488,500 workers will be required in the WA economy over the next 10 years, if economic growth is to
be maintained at the average rate experienced since the beginning of last decade. However, these additional labour
needs cannot be met on the basis of the current labour market and population trends. Even with the current strong
rates of population growth, it is estimated that there will still be a shortfall of more than 210,000 workers in WA
by 2020.
With more than $210 billion worth of major investment projects earmarked for the state, it is not surprising that a
significant share of these additional workers will be required in the construction and mining sectors. However, WA
will not only require workers f or these booming sectors. A key aspect of the states future labour needs is that workers
will be required in businesses of all sizes, and across all sectors of the economy. The future labour requirements for
the states services sectors are also considerable, particularly in healthcare and community services, professional
services, and retail.
Labour shortages are not only expected to be widespread across all industries of the state, but across all regions.
While the greatest number of workers will be required in the states capital, the most southern and northern regions
of WA will also have significant labour needs.
The predicted labour shortages will make it difficult (if not impossible) for the WA economy to realise its full potential
in the medium to longer term, unless measures are put in place to ensure that the labour force is able to growth in
line with future economic activity.CCI believes that it is imperative that a human capital strategy be developed, that will help increase the size of the
labour force (through population growth and higher levels of labour force participation), and improve the productivity
of the current workforce.
There is a clear and pressing need to increase the states population. Western Australias labour requirements mean
that it is highly dependent on the migration program to supplement the local population growth and other policies
aimed at expanding the labour market.
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Although the migration program operates at a Federal level, the WA Government has an important role in representing
the needs of the local business community. To ensure that the migration program is suitable for Western Australian
social and economic conditions, the State Government needs to establish supporting policies and programs, while
also advocating for changes to the migration program.
While boosting the states population is a critical strategy to address labour shortages, it will also be necessary to
ensure that WA has the necessary social and economic infrastructure to support this higher population. To ensure
that WA will be able to cope with the influx of people, the Government should develop a strategic direction for the
state, which will provide the private sector, as well as key State Government agencies and trading enterprises, a clear
direction to work towards over the long-term.
A strategic plan for the state would encompass aspects of infrastructure development, the creation of new and additional
housing to support a growing population, and consider the associated support services that would be required, such
as energy, water, waste management, public transport, education and policing. This will ensure that Perth and WA
is, and continues to be, a liveable, attractive and vibrant destination that will attract and retain human capital, and is
well prepared for a growing population.
There is also significant scope to add to the supply of workers by boosting labour force participation. Althoughthe strength of the WA economy and the employment opportunities which have been created in recent times have
provided the incentive for many people to enter the workforce, Australias participation rates still remain relatively
low compared to other OECD nations.
In particular, there is considerable scope to raise participation among specific sectors of the community, including
prime aged males, women (particularly of child-bearing age), people with disabilities, people nearing retirement,
and Indigenous Australians.
The Government and business community should look to implement strategies that will raise the level of workforce
participation, particularly among sectors of those sectors of the community that are underrepresented in the labour
force. These strategies should focus on improving the incentives to work and remove the disincentives to work, and
focus on areas such as taxation, welfare assistance, and education and training.
Raising the productivity of the current workforce will also be an important aspect to developing a human capital
strategy for WA.
Central to improving productivity is to maintain a flexible industrial relations system, which allows businesses to
respond to constantly changing national and global economic circumstances. CCI supports an industrial relations
system that ensures that the relationship between the employer and their employees is paramount, assists businesses
to secure workplace productivity, innovation, flexibility and efficiency; restore the balance between the rights and
responsibilities of employers, employees and unions; and reduces regulation and minimise interference by third
parties in the management of a business.
The current Fair Work Act 2009 is not capable of facilitating the fundamental changes required to allow workplacesto become sustainable and successful in the global economy. However, in the absence of any other system, there are
a number of changes which should be made to the Fair Work Act 2009 to enhance workforce productivity.
A strong education and training system will also ensure ongoing improvements in productivity, by making sure that
young people are provided with the necessary skills for WA to maintain an appropriately skilled workforce. The
education and training system should be internationally competitive, provide choice, and be responsive to the needs
of individuals and industry.
A flexible and competitive education system is critical from the beginning of schooling, with a focus on the basics
of literacy, numeracy, and generic employability skills for every student.
While Governments at both the state and Commonwealth level have a key role to play in developing policies to address
labour shortages, it is also important that the business community adapts to the changing labour market. Businesses
will need to find ways to develop and source appropriate labour, and ensure that they implement initiatives that help
to build a positive culture within their organisation.
Recommendations
Building the states human capital will require a multi-faceted approach, which recognises the unique challenges
faced in terms of labour shortages today, and the longer term challenge of an ageing population and workforce.
The key recommendations aimed at building the states human capital which have been detailed in the discussion
paper are set out below.
Population Growth
A population goal should be introduced for WA, that will ensure suitable labour to meet industry demand and
a smooth demographic profi
le for the state.
A targeted migration program should be developed, that focuses on:
- migrants from key trading partners;
- overseas students;
- foreign holiday makers;
- interstate workers; and
- expatriate Australians.
The Government should develop a comprehensive program to promote WA as a favourable place to live and
work.
Industry and region specific skills audits should be undertaken to determine skills which are in highest
demand.
A number of changes should be made to the migration program, to ensure that it meets WAs needs.
These are:
- market salary levels should be reassessed and removed where not warranted;
- the current skill assessment process should be removed for the temporary migration program and
improved for the general skilled migrants;
- the English language competence requirements on the temporary migration program are unnecessarily
high and should be removed;
- the narrowing of occupations classified under Subclass 457 Visas should be reversed, to allow
businesses to access semi-skilled and unskilled labour on a temporary basis; and
- greater clarity should be provided for labour agreements so that businesses can use them, while providing
suitable flexibility so that all industries have the capacity to attract suitable workers.
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A strategic direction should be developed for WA, to ensure that the long term needs of the state and its population
are met. This should focus on areas such as economic and social infrastructure, housing affordability and vibrancy
and liveability of Perth and the regions.
Measures should be put in place to improve housing affordability, both in Perth and the regions. These should
focus on the supply of land, ensuring sufficient raw materials to support housing construction, and ensuring that
planning mechanisms allow for infill.
Raising Workforce Participation
A range of taxation measures could be adopted to improve overall participation in the workforce.
These include:
- personal income tax reform is critical to improving workforce participation. Key reforms include
increasing the tax free threshold, a flattening of the scales and in the longer term, decreasing the
top marginal tax rate to align with the company tax rate, with thresholds indexed to inflation;
- effective marginal tax rates should be addressed, to maximise the incentives to move from incomesupport payments to increased participation in paid work; and
- greater innovation should be introduced in the education system, including through reforms to funding
arrangements which are based on improving outcomes rather than following processes.
A range of other measures should be adopted aimed at improving workforce participation among specific sectors
of the community which are underrepresented in the labour force.
To improve workforce participation among women:
- changes should be made to allow child care to be salary sacrificed, in the same way that is allowed for
motor vehicles, superannuation and computers;
- ongoing training initiatives should be introduced, that will assist with re-skilling workers that have
previously exited the workforce;
- businesses should look to introduce flexible working arrangements where possible, such as flexible hours,
part time options, and job share arrangements; and
- businesses should implement policies to address pay disparities between genders where appropriate.
To improve workforce participation among people with disability:
- employers should increase apprenticeship placement opportunities for people with disability;
- services are needed to assist people with disability transition from education to employment;
- skills development for people with a disability should be aligned with labour market requirements; and
- ongoing education is needed for employers to dispel myths about hiring workers with disabilities.
To improve workforce participation among Indigenous Australians:
- workforce programs should be developed that are tailored to the individual circumstances of Indigenous
people; and
- expanded language and literacy programs are needed to assist people from diverse cultural backgrounds
and Indigenous individuals.
To improve workforce participation among older aged workers:
- life-cycle learning programs that facilitate the retention of skills and enables the re-training of older aged
cohorts should be introduced;
- funding support for education and training should be provided to employers, in the form of either tax
rebates or training subsidies; and
- the work bonus program should be applied to the income of spouses who are nearing retirement age.
Increasing Productivity
Changes could be made to the current Fair Work Act 2009, which would improve productivity of the
workforce.
- Strict sanctions against any unlawful behaviour should be applied to ensure continuity of production and
supply.
- Agreement making should be designed to encourage flexibility, efficiency and innovation.
- The role of third parties should be to assist businesses and their employees to achieve business objectives
enhancing levels of productivity.
- Union entry to a work site should be subject to the union being a signatory to a site enterprise agreement
ensuring minimal interference to business operations.
The education system should focus on the basics of literacy, numeracy, and general employability skills for
every student, from early childhood education through primary and secondary education.
Resources should be targeted to ensure that at risk individuals and groups are not left behind in the system.
Reforms should be introduced to ensure the sustainability of the education workforce and high quality of teachers,
including reviewing student to teacher ratios, remuneration, and ongoing training.
Reform to the education system should continue, to provide greater autonomy to schools and principals in
delivering education.
Innovation and responsiveness in the WA education system should be encouraged by increasingly linking funding
to outcomes.
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Economic Context
Over the last decade, the WA economy experienced
a period of economic growth unlike any other in the
states history. This saw the local economy double in
size, almost 200,000 jobs created, and record numbers
of people move to the state to share in the positive
conditions.
While this period of strong growth has created much
wealth for the state, it also brought about a range
of challenges. The most pressing challenge was the
extremely tight labour market conditions, which
resulted in the emergence of severe and widespread
labour shortages.
More recently, global events have temporarilyinterrupted the states rapid growth trajectory. 2009 will
be remembered as one of the most severe downturns
the world has experienced, with the fallout from the
global financial crisis driving the world economy into
recession for the first time since World War 2.
Locally, the WA economy was not immune from the
impact of the weaker global economic conditions. The
downturn saw both consumer and business confidence
fall, and economic growth slow considerably. However,
WA was one of few advanced economies to avoid
a recession, with the local economy expanding by
0.75 per cent during 2008 09.
The weaker economic conditions also moderated
labour market pressures, which saw the local
unemployment rate rise from historical lows of less
than three per cent during late 2008, to a peak of
5.7 per cent in September 2009 (Chart 1).
However, the unemployment rate did not rise to the
heights experienced in previous downturns. With
the memory of labour shortages fresh in the minds
of employers, a key trend to cope with the weaker
economic conditions was the tendency of businesses
to cut staff working hours, rather than standing down
workers.
The slowdown in the local economy provided some relief
for local employers from labour shortages. However,
even throughout the downturn, around one fifth of WA
businesses still found labour to be scarce.
While the impact of the global economic downturn
has been significant, this will be only a short term
interruption to the states longer term growth profile.
The WA economy is nowfi
rmly on the path to recovery,with 2010 set to mark the beginning of the next phase
of growth and prosperity for WA.
The resurgence in the global economy will provide an
important boost to the WA economy, and will continue
to do so for some time to come. After supporting the
world economy throughout the global slowdown,
developing nations have led the way to recovery. In
particular, economic growth in both China and India
quickly bounced back to levels seen prior to the global
financial crisis.
These developing nations are expected to provide a
long term impetus for the WA economy, due to their
continued strong demand for the states minerals and
energy resources. WAs longer term growth profile will
also be boosted by more than $210 billion worth of
major investment projects currently earmarked for the
state (in March 2010) (Chart 2).
Chart 1
Unemployment RateWA and Australia, Seasonally Adjusted
2%
3%
4%
5%
6%
7%
8%
9%
10%
11%
12%
Apr 90 Apr 94 Apr 98 Apr 02 Apr 06 Apr 10
2%
3%
4%
5%
6%
7%
8%
9%
10%
11%
12%
Source: ABS Cat. 6202.0
WA
Australia
As a result, WA will soon see growth return to the
historically high levels seen in recent years. CCIs
March 2010 forecasts predict the WA economy willreturn to growth rates in excess of five per cent per
annum within the next two years (Chart 3).
The states labour market is also expected to see the
extremely tight conditions experienced prior to the
global financial crisis resurface, as businesses gear up
for the next wave of activity.
The December quarter 2009 Commonwealth Bank-CCI
Survey of Business Expectations found that more than
half of all WA businesses believe that labour shortages
will have a negative impact on their operations in a
years time, with around one quarter already describing
labour as scarce.
The tendency of businesses to hold onto labour during
the downturn will mean that the pool of available
workers to facilitate the next wave of growth will be even
smaller, with CCI predicting a return to unsustainably
low unemployment rates within two years.
The extent to which businesses are concerned about
workforce issues was highlighted by the March quarter
2010 Commonwealth Bank-CCI Survey of BusinessExpectations.
The survey revealed that labour-related issues have
again topped the list as the most pressing issue for
WA businesses in the year ahead. Nearly one quarter
of local businesses rated labour shortages as their
primary concern for the year ahead, while around half
rated labour shortages as one of their top three areas of
concern (Chart 4).
With difficulties finding labour expected to be a major
issue in the year ahead, businesses are also concerned
about the implications this will have for their wages bill.Around one fifth of respondents identified wage costs
as the biggest issue facing their business in 2010, while
more than 60 per cent cited wage costs as one of their
top three areas of concern.
Labour Force Projections
In November 2007, CCI undertook economic modelling
around WAs labour force requirements. These
projections found that for the states economy to
continue to grow at the high rates recorded in recent
years, an additional 400,000 workers would be required
in by 2017.
CCIs projections also revealed that these additional
workers could not be met on the basis of current
population and labour market trends, and that WA would
experience a shortfall of 150,000 workers.
While the global financial crisis has had significant
implications for the states labour market over the past
year, this short term interruption to economic growth
will not alter the development of an absolute labourshortage in WA in the medium term.
More recently, CCI has conducted further research
around the states future labour force requirements. These
updated predictions show that WAs labour requirements
will be even greater than earlier estimates. CCIs latest
forecasts now indicate that an additional 488,500 workers
will be required in the WA economy over the next
10 years.
Chart 2
Investment Projects, AustraliaValue by State, March 2010
$0Bn $50Bn $100Bn $150Bn $200Bn $250Bn
Western Australia
Queensland
New South Wales
Victoria
South Australia
Northern Territory
Tasmania
ACT
Source: Access Economics Investment Monitor
Chart 3
Economic Growth, WA & Australia% Change in GSP, GDP
-2%
0%
2%
4%
6%
8%
10%
1 99 6/ 97 2 00 0/ 01 2 00 4/ 05 2 00 8/ 09 2 01 2/ 13
Source: ABS Cat. 5220.0, 5206. 0, CCI WA
-2%
0%
2%
4%
6%
8%
10%
Western Australia
Australia Forecast
Chart 4
Top Priority of WA Business in 2010
% of Respondents
0% 5% 10% 15% 20% 25%
Labour Availability
Wage Costs
Global Economic GrowthWorkplace Relations
Regional Development
Borrowing Costs
State Govt Regulation
Taxation LevelsInfrastructure Constraints
Local Govt. Regulation
Energy Supply
City VibrancyClimate Change
Source: CBA-CCI Survey of Business Expectations
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Again, these additional labour needs cannot be
met on the basis of the current labour market and
population trends. To put this into perspective, on the
basis of current strong population growth trends, it is
estimated that there will still be a shortfall of more than
210,000 workers in WA by 2020.
These estimates are sensitive to changes in the key
economic parameters of economic growth, population
growth and workforce participation (see Table 1).
For example, if economic growth is one per cent
higher than projected over the forward estimates, this
will see the expected shortfall increase to more than
303,000 workers.
With more than $210 billion worth of major investment
projects earmarked for the state, it is not surprising thata significant share of these additional workers will be
required in the construction sector. CCI estimates that
almost 130,000 additional workers will be required in
the construction sector over the next decade, accounting
for more than a quarter of the states future labour needs.
However, CCI predicts the sector will experience an
absolute shortfall of almost 56,000 workers (Chart 5).
Similarly, the mining sector is also expected to require a
significant number of additional workers to fuel its rapid
growth, and meet the strong demand from overseas
for the states resources. Over the next 10 years, CCI
predicts that more than 69,000 additional workers will
be required in the mining sector, representing around
14 per cent of the extra workers needed. This industry
is also expected to fall well short of their labour
requirements, by almost 30,000 workers.
However, WA will not only require workers for the
booming mining and construction sectors. A key aspect
of the states future labour needs is that workers will be
required in businesses of all sizes, and across all sectors
of the economy.
The future labour requirements for the states services
sectors are also considerable.
Healthcare and social assistance will be a key industry
where additional workers are required. In order to
accommodate strong population growth and ageing,
the healthcare and social assistance sector will require
almost 45,000 additional workers - or more than nine
per cent of the states future labour needs. However,
CCIs forecasts show that there will be a shortage
of more than 19,000 workers in the health sector by
2020. CCIs estimates also show that a similar numberof workers will also be required in the professional
services sector.
A significant number of workers will also be required
in the retail sector. CCIs latest predictions show that
more than eight per cent of the states future labour
needs (or almost 40,000 workers) in the coming
10 years will be for the retail sector. However, a shortfall
of more than 17,000 workers is expected to exist in this
sector by 2020.
Further detail on WAs future labour requirements by
industry can be found in Table 2.
Labour shortages are not only expected to be widespread
across all industries of the state, but across all
regions.
Not surprisingly, the greatest number of workers will be
required in the states capital. CCIs latest predictions
show that around three quarters of the states future
labour needs will be required in the Perth metropolitan
area.
In total, this represents more than 360,000 additional
workers. The shortfall of workers is also expected to be
significant, at more than 156,000 (Chart 6).
A significant number of workers will also be required
in the south of the state. Over the next 10 years, an
additional 53,000 workers will be required in the Peel
region, and a further 46,000 in the South West. Together,
these regions represent around a fifth of the states future
labour force needs.
However, the Peel and South West regions are also
unlikely to reach this target at present. The shortfall of
workers in the Peel region by 2020 is expected to reach
nearly 23,000, while the South West is forecast to fall
almost 20,000 workers short.
There will also be strong demand for workers in the
north of the state. By 2020, the Pilbara region will
require almost 10,000 additional workers, while the
Kimberley will need more than 8,000. However, the
Pilbara is expected to fall short of this target by more
than 4,000 workers, while the Kimberley is likely to
record a shortfall of more than 3,000 workers.
Chart 5
Labour Requirements by Industry% of State Total
0% 5% 10% 15% 20% 25% 30%
Construction
Mining
Health & Social
Professional Services
Retail
Education
Transport
Admin & Support
Manufacturing
Hospitality
Other
Source: CCI
Chart 6
Labour Requirements by Region% of State Total
0% 10% 20% 30% 40% 50% 60% 70% 80%
Perth
Peel
South West
Pilbara
Kimberley
Great Southern
Other
Source: CCI
Table 2WA Labour Requirements in 2020By Industry
Current Workforce Additional Workers % Increase% of WA Total
Requirement
Construction 124,800 129,753 104.0% 26.6%
Mining 74,100 69,351 93.6% 14.2%
Healthcare and Social Services 119,900 44,869 37.4% 9.2%
Professional Services 91,600 44,211 48.3% 9.1%
Retail 112,600 39,516 35.1% 8.1%
Education 94,300 35,035 37.2% 7.2%
Transport 63,100 31,213 49.5% 6.4%
Administration and Support 38,100 26,571 69.7% 5.4%
Manufacturing 91,400 16,640 18.2% 3.4%
Hospitality 70,200 14,924 21.3% 3.1%
Other 230,300 36,417 15.8% 7.0%
Total 1,110,400 488,500 44.0%
Table 1
WA Labour Requirements in 2020
Economic
Growth
Population
Growth
Participation
Rate
Workers
Required
1% Increase 581,470 488,500 488,500
1% Decrease 412,000 488,500 488,500
Total Shortfall
1% Increase 303,300 54,390 206,700
1% Decrease 134,320 350,680 215,000
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A Human Capital
Strategy for WA
If WA is to take full advantage of the wealth of
opportunities which lie ahead, it is critical that measures
are put in place to build the states human capital.
This will require a multifaceted approach that
recognises the unique challenges faced in terms of the
short term critical labour shortages which are expected
to resurface as the economy returns to growth, as well
as the persisting longer term challenge of an ageing
population and workforce.
To ensure that WA will be able to meet its labour needs,
a human capital strategy should be developed which isbased around building the states population, raising
workforce participation, and improving productivity.
It is also essential that measures are put in place to
address the broader policy issues which will enable the
state to attract and retain the workforce that business
requires for the immediate and longer term.
While Governments at both the State and Commonwealth
level have a key role to play in developing policies to
address labour shortages, it is also important that the
business community adapts to the changing labour
market.
The key issue for business will be in promoting more
flexible workplaces, which will provide employees
with more options as to when and how they complete
their work, while ensuring they are still working their
full hours. Some options for improving workplace
flexibility include flexible working hours, home based
work, alternative leave arrangements, part time roles
and job sharing.
Ensuring more flexible workplaces will be centralto improving participation and engagement with the
workforce, and ultimately lead to higher productivity.
Building the States Population
Population growth is considered to be a critical
element to the economic development of a nation. If
the population is not sufficient to sustain the growth in
the economy, this can result in widespread labour and
skill shortages, and hamper the ability of businesses
to grow.
While there is a need to address the ageing population
of the country and encouraging a higher fertility rate
amongst women is not the appropriate channel to do
so. The factors which determine fertility and death
rates are complex, in some cases not well understood,
and not readily manipulated by government. Instead,
the component of demographic trends which the
government can and should seek to influence ismigration.
WAs labour requirements mean that it is highly
dependent on the migration program to supplement
the local population growth and other policies aimed
at expanding the labour market.
The migration program, both temporary and permanent,
requires significant changes to improve their capacity
to address WA business requirements.
Recommendations
There are a number of ways to ensure an adequate
migration policy framework for WA. These are:
a population goal should be introduced for WA,
that will ensure suitable labour to meet industry
demand and a smooth demographic profile for the
state;
a strategic direction should be developed for the
WA, to ensure that the long term needs of the state
and its population are met;
a targeted migration program should be developed,
that focuses on:
- migrants from key trading partners;
- overseas students;
- foreign holiday makers;
- interstate workers; and
- expatriate Australians;
the Government should develop a comprehensive
program to promote WA as a favourable place to
work; and
industry and region specific skills audits should be
undertaken to determine skills which are in highest
demand.
Given that migration is a Commonwealth responsibility,
reviews to the system have not always reflected the
needs of the WA economy.
To ensure that the states labour needs are addressed in
the migration program, the following changes should
be made:
market salary levels should be reassessed and
removed where not warranted;
the current skill assessment process should be
removed from the temporary migration program
and improved for the general skilled migrants;
the English language competence requirements on
the temporary migration program are unnecessarily
high and should be removed;
the narrowing of occupations classified under
Subclass 457 Visas should be reversed, to allow
businesses to access semi-skilled and unskilled
labour on a temporary basis; and
greater clarity should be provided for labour
agreements so that businesses can use them, while
providing suitable flexibility so that all industries
have the capacity to attract suitable workers.
Background
Migration, for practical and moral reasons, is the
component of demographic change that is mostsusceptible to policy influence. The immigration policy
should have as its core objective to balance economic,
social, humanitarian and environmental concerns in a
manner which yields the best outcomes for current and
future Australians.
As discussed in CCIs previously released Building
Human Capital discussion paper, without a strong
immigration program, Australias population would
be expected to peak and then decline in 30 years
(See Box 1).1 While population decline is not an
intrinsically negative event, the research contained in
the paper suggests that it would result in real per capita
income declines.
The migration program has undergone substantive
changes over the past decade. The main objectives
have been to respond to the need for skilled people, the
ageing of the local population, and the globalisation of
the labour market. The migration program has also been
changed substantially in response to emerging economic
and social issues.
Although the migration program operates at a Federal
level, the WA Government has an important role in
advocating for changes that will better meet the unique
needs of the WA economy. To ensure that the migration
program is suitable for Western Australian social andeconomic conditions, the State Government needs to
establish supporting policies and programs, while also
advocating for changes to the migration program.
Box 1: Ageing of the Population
The evidence of a fundamental change in Australias
economy is undeniable. The average Australian is
now living longer then ever before, which has meant
that the older aged population is growing in relation
to the rest of society.
The consequence of the ageing population is that
relatively fewer workers will be available to support a
relatively larger older population in the future.
Australias population is projected to grow and
continue to grow older, with the highest rates
of growth experienced in people over 65 years.
According to the mid-series projections by the ABS,
the median age of WAs population is projected to
rise to 45.3 years in 2051, up from just 36.2 years
in 2006. At the same time, around one quarter ofthe states population is expected to be older than
65 years of age, compared to just under 12 per cent
in 2006.
The ageing of the population represents a significant
structural challenge for the WA economy, and its
workforce. These longer term trends will require a
different response to the short term labour shortages
that have been seen since the beginning of the
decade.
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Migration Policy Framework
The State Government has a key role to play in ensuring
an appropriate migration policy framework for WA.
A key aspect of this should be to adopt a population
goal for WA. This population goal should represent the
aspirational number of people the State Government
believes should be living in WA in the future, and should
also be established for key population centres.
The population goal should take into account social
cohesion, infrastructure amenity and sustainability as
well as the projected gap between domestic workforce
growth and anticipated labour demand.
It is also important that the population goal be reassessed
every two years, to ensure that it is still appropriate tothe circumstances of the state.
The State Government should also develop programs
to attract suitable migrants to WA, to bridge the gap
between the natural population growth and desired
population growth. Any programs that are established
for interstate and overseas migration should have
explicit objectives to be achieved, and would form
the basis upon which to evaluate the success of these
programs. These could either take the form of numerical
targets or a percentage of Australias overall migration
quota.
There are several sectors of potential workers that
migration attraction programs should be directed
towards.
The states key trading partners should be targeted as a
potential source of migrants, to further economic ties.
Despite the WAs strong economic ties and close
proximity to Asia, only a small proportion of the states
migrant population (15 per cent) are from this region.
Notably, only 0.4 per cent of the states populationwas born in China - the states largest export market.
Australia has marginally closer migrant ties with
another trading partner of growing importance, India,
with 0.8 per cent of the states migrant population from
there.
Meanwhile, almost 11 per cent of migrants were born
in the United Kingdom, while a significant proportion
also have family ties in the UK. These links provide
a significant opportunity to attract overseas family
members into the state.
Migration attraction programs should also be targeted to
holders of working holiday visas. In spite of restrictions
surrounding work requirements, working holiday
makers represent the largest proportion of visas granted
in WA over the past few years.2 Policies and programs
should be introduced to encourage working holiday
makers to seek permanent residence in WA.
Because of its high quality education system, WA has
a large number of overseas students, which represent
a valuable source of potential labour. Programs should
be developed to encourage overseas students with
management skills to seek permanent residence upon
successful completion of their studies, with a particular
focus on students with degrees that are in high demand
in the local economy.
As well as programs to attract migrants to the state,the Government should also look at ways to attract
expatriates back to WA. Many of the states younger
workers are attracted overseas early in their careers to
take up work opportunities, while a large number also
travel overseas on working holiday visas simply to
experience different cultures. These groups often end
up staying and working overseas for extended periods
of time.
Programs should also be developed to encourage greater
levels of interstate migration, given the number of
people moving to WA from other areas of the country
is relatively low. In particular, these programs should
focus on areas within states such as Victoria or New
South Wales, where there are large pools of people
that are either underutilised or disengaged from the
labour market.
Improving labour mobility would provide significant
benefits to WA and other states, as well as the
Commonwealth through lower welfare payments. In this
regard, further research is needed to determine whether
there is scope for the Federal Government to provide
incentives to encourage these individuals to migrate toWA, and the form that these incentives might take.
A comprehensive marketing program should also be
developed to promote WA as the destination of choice
and provide information about the liveability, and
opportunities that exist in the state. The Government
should be a key driver in the development and
implementation of this program, which should also
include a discrete component on areas experiencing
strong regional growth.
Given that a significant portion of the economic activity
in WA is located in regional centres, programs should
also be developed to attract migration to areas such as
the Goldfields, Pilbara and the Kimberley.
An important part of the migration program should
also be to ensure that it is targeting the workers that
are in greatest demand. To ensure that migration is
targeted towards appropriately skilled workers, regular
industry specific skills audits should be undertaken to
ascertain areas where a shortage may exist. Industry
Training Councils (ITCs) which are funded by the
WA Government, currently perform skills audits as
part of environmental scans that inform industry level
workforce planning. To ensure the currency of this
data, all ITCs should perform regular skills audits using
common agreed methodology.
Issues with the current Migration Program
In recent times, there have been numerous changes
in the temporary and permanent migration programin response to economic and social pressures. As a
consequence, the overall migration program is highly
fragmented, and has led to inconsistent requirements
across different classes of visas.
To address this issue, a comprehensive review of the
migration program should be conducted to ensure that
Australia has a migration system that is capable of
attracting suitably skilled individuals in an international
labour market.
The temporary migration program is particularly
important to WA. Temporary workers have made a
valuable contribution to the supply of labour in WA in
recent times, and have allowed businesses to respond
to changing economic circumstances.
A number of features of the current migration program
will diminish its capacity to meet labour demand.
The market salary level (MSL) requirement for
temporary workers should be reassessed and removed
where not warranted. The MSL means that employers
must demonstrate that they are offering potential
migrant workers the same levels of salary as they
would domestic workers. This creates a considerable
administrative burden if there is no equivalent role
occupied by an Australian worker, which is the case
for many companies.
The MSL must also be above the Temporary Skilled
Migration Income Threshold (TSMIT), a minimum
salary threshold. Removal of these requirements would
improve the overall responsiveness of the migration
program. Currently, the TSMIT is too high, and
employers of some semi-skilled and unskilled workers
are unable to fulfil these requirements. This means
that they are not able to access visas under the skilled
migration program.
The current skill assessment process should be removed
for the temporary migration program and improved
for the general skilled migrants. Businesses have the
obligation to ensure that temporary workers are capable
of doing the work for which they are employed. They
also have the obligation to return the temporary worker
to their country of origin if they are unable to undertake
the work. As a consequence, having a formal skill
assessment process is unnecessarily administratively
burdensome for the temporary migration program.
There is also a need to ensure the English language
competence requirement reflect the level required by
specific industry needs.
The English language competence requirement in
the skilled migration program is unnecessarily highand is the source of inconsistency among different
visa classes. Measured by the International English
Language Testing System (IELTS), potential migrants
must obtain a score of between 4.5 and seven, depending
on the class of visa. In addition, recent changes make
the entry requirements for temporary visa holders such
that vocational English is no longer recognised as being
a valid level.
The current requirements mean that workers who
may have the necessary trade skills are disadvantaged
because they are unable to attain the required score.
To be considered for either permanent or temporary
sponsored migration pathways, employers are also
required to demonstrate their commitment to training
and developing Australian workers, through a financial
commitment of approximately two per cent of their
current payroll.
This requirement is a blunt instrument that is used by
the Government to address its policy objectives at a cost
to business, and should be abolished. This condition
acts as a disincentive for business to recruit migrantsto fill vacancies, and disproportionately impacts on
smaller businesses that have less capacity to justify the
administrative requirements.
The narrowing of Subclass 457 visa classifications
should be also reversed, to allow for occupations
classified as Australian Standard Classification of
Occupations (ASCO) five to seven. Given that WA
is the largest user of semi-skilled workers classified
under ASCO five to seven, this will ensure that local
employers can access semi-skilled and unskilled
workers on a temporary basis.
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Another avenue for employers to access unskilled
workers is through labour agreements. However, the
process of establishing labour agreements has not been
clear and has not been widely used by employers, with
only 19 agreements in total in place for WA.
To improve consistency, responsiveness and
administrative efficiency, greater clarity should be
provided around the requirements of labour agreements,
and enhanced transparency in establishing the
conditions of the labour agreement between the business
and government. There should also be sufficient
flexibility in the process to ensure that the requirements
of different industry sectors can be addressed
Planning for Population Growth
Encouraging and achieving a sustainable level of
population growth will require the coordination of
activities across a range of areas that impact both the
public and private sector.
A recent review of state and territory policies to support
population growth, conducted by the Department of
Immigration and Citizenship, found that WA lacked
articulated policies in a wide range of key areas.3 As a
consequence, the State Government was found to lack
the policy framework required to support population
growth.
To ensure that WA will be equipped for a higher
population, the Government should develop a State
Strategic Plan, which would provide the private sector,
as well as key State Government agencies and trading
enterprises, a clear direction to work towards over the
long-term.
A strategic plan for the state would encompass aspects
of infrastructure development, planning for the
release of additional land for housing and consider the
associated support services and utilities required tosupport a growing population. This includes energy,
water, waste management, telecommunications, public
transport, education and policing.
A critical aspect of developing a strategic direction
is that it would need to remain dynamic and adjust
according to changing needs and demands of the state.
The strategic direction would need to be reviewed
annually, to ensure that it is still relevant and consistent
with the Governments priorities.
Recommendations
There are a number of measures that could be adopted
by the Government to ensure that WA is well prepared
for a higher population in the future. The State
Government should:
develop a clear strategic direction for the state, to
ensure that the state is able to meet the needs of
a growing population. This should pay particular
attention to land use planning and provision of
economic and social infrastructure to enhance
vibrancy and attract new residents to WA;
engage with the private sector where appropriate
to improve delivery of cost effective community
services, such as health and education;
ensure planning mechanisms allow for urban infill
to encourage higher living densities, to manage
urban sprawl, particularly in the inner suburban
zone of Perth;
plan and release as required additional land
zoned residential and residential-deferred in
the Perth metropolitan and regional areas, having
consideration for urban infill at least in line with
demand;
investigate the barriers which inhibit or restrict
the development of land zoned residential on the
margin of the urban areas;
allow more market-based decisions to be made in
relation to determining block size;
protect the supply of basic raw materials are made
available to support construction activities in the
housing sector;
ensure that effective buffer zones that accommodate
for the expansion of industrial and commercial land
are integrated into the states planning, to avoid
community conflict with businesses and poor social
outcomes for residents; and
reduce the amount of regulation and compliance
that impacts upon small business, allowing them
greater freedom to focus on creating vibrant places
through entrepreneurial business activity.
Infrastructure Development
High quality economic infrastructure, appropriately
placed suitable land and efficient planning processes are
key enablers for industry growth and the attraction of
business investment to WA, particularly for industries
where the investment location is flexible. Appropriate
economic and social infrastructure will also be
necessary to ensure that WA can meet the needs of a
growing population.
The WA Government plays a critical role in the
facilitation and development of vital social and
economic infrastructure, and it is important that such
infrastructure is provided in a fiscally responsible
manner.
There will always be numerous competing infrastructurerequirements that must be prioritised and funded within
a sound fiscal framework. It is for this reason that CCI
has long supported the development of a medium
term infrastructure plan, to provide a gr eater degree of
certainty as to the likely future infrastructure projects
that will be undertaken in the state and assist in
de-politicising the prioritisation process.
Such a plan is also necessary to ensure that the state is
prepared to support a higher population. An increasing
population will bring greater demand on service
and support infrastructure. The delivery of water,
electricity, gas, telecommunications, transport and
waste infrastructure and services, and other community
services are all aspects that will need to be considered
and planned for as part of an overall human capital
strategy.
Ensuring that the state has sufficient economic and
social infrastructure would assist with social cohesion,
by allowing migrants to better integrate into the local
economy. It would also maintain WAs capacity to attract
and retain workers based on the lifestyle and amenityof the location. In this regard, a state infrastructure
plan should be based around supporting the states
economic and population requirements, and focus on
both economic and social infrastructure.
A growing population will place increasing pressure
on the states essential infrastructure and services. It is
critical that a plan is set out for these services, to ensure
that acceptable levels of service are available, and at a
reasonable cost to consumers.
The Perth metropolitan region is already large.
Fortunately, early planning for future city growth,
including the reservation of transport corridors to help
guide suburban growth, has enabled Perth to spread
without facing unbearable traffic congestion. A new
phase of planning is now required to ensure additional
growth will not create undue traffic congestion which
would limit mobility, and add further cost and time
barriers to commuters.
A plan for the states future infrastructure needs
should include consideration of future traffic flows,
and assessment as to how current arterial roads can be
enhanced and extended, as well as developing a plan for
how public transport can be more effectively utilised to
ease the burden on road infrastructure, and minimise the
amount that needs to be expended to support a growingpopulation.
Successful delivery of necessary community services,
including health, education and law and order will
be affected by the growth in WAs population. The
private sector is well placed to deliver a number of
these services to ensure that supply is able to meet the
level of demand, particularly in the areas of health and
education. Government should seek to engage with the
private sector to ensure that these services are able to be
delivered at a high standard and at a competitive price
for a growing population.
It is also critical that the future development of regional
centres is planned carefully. This will ensure that these
areas grow in a managed way that supports not only the
centre itself, but also the entire region that they serve.
These communities have similar infrastructure needs to
the Perth metropolitan area, including the need for basic
utilities and social infrastructure. However, there are
some unique challenges in the delivery and operation of
regional infrastructure. WAs unique aspects, which see
significant business activity occurring in isolated areas,
must be accounted for from a planning and developmentperspective.
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Housing
A key element in attracting people to WA is for there
to be affordable housing. The rising cost of land and
housing is having a serious impact on the capacity
of employers to attract workers to Perth and regional
centres.
WA has lost its attractiveness as a place where people
on moderate incomes can buy a home at a reasonable
price.
In 2001, Perth was the most affordable mainland capital
city in the country while WAs regional centres were also
affordable relative to their eastern state counterparts.
Since 2001, housing affordability has declined
significantly - a trend that needs to be addressed if Perth
is to be an attractive destination for migrants.Housing affordability is also a key issue in regional
areas of the state. In some key regional centres, housing
affordability has become a critical issue as median house
prices have soared above the level being experienced
in the metropolitan area (Chart 7).
CCI believes that the WA Government must act urgently
to improve housing affordability in the state.
The government should recognise that increasing
population will likely result in higher living densities,
particularly in the inner suburban zone of Perth.
This will require specific strategies to manage urban
infill, which may impact zoning regulations and local
government by-laws.
In particular, the Government should look to establish
more realistic and achievable infill targets and
remove any barriers to their development. In addition,
regulations should be changed to allow for increased
construction of multi dwelling units.
There are a number of measures related to the supply of
land and housing, which would help improve housing
affordability in WA.
Barriers which inhibit or restrict the development of
land zoned residential on the margin of the urban areas
should be addressed. Adequate planning for the future
release of land when supply dries up is essential.
To ensure that housing is affordable in regional areas
of the state, it will also be important to ensure that
sufficient land is made available in regional areas
of WA.
A key aspect of boosting the supply of land and housing
will also be to allow more market based decisions to be
made in relation to determining block size.
An important aspect of ensuring housing affordability
will also be to ensure the availability of competitively
priced construction materials, which will allow new
housing to be constructed at a reasonable price. Thiswill require establishing a state approach to planning
for raw material extraction, which will avoid conflicting
objectives from town planning schemes, and regional
plans.
The Government should also ensure that effective buffer
zones that accommodate for the expansion of industrial
and commercial land are be integrated into the states
planning, to avoid community conflict with businesses
and poor social outcomes for residents.
Liveability
Another important way to attract people to migrate
to WA is to improve the liveability of Perth and the
regions.
Perth needs to improve its attractiveness as a place to
live and work, to encourage talented people to migrate
to WA. This requires addressing matters such as
removing current restrictions on retail trading hours,
investing in economic and social infrastructure, and
addressing the intangible elements that make a city or
region liveable.
There remain a number of challenges to Perths
vibrancy. Despite some recent moderate efforts at
reform, excessive regulation remains a problem that
is impacting upon the ability for business to create
enhanced vibrancy in Perth.
Western Australias retail trading hours regulation
impedes competition by prescribing when shops can
trade and allows some business to trade outside of
regulated hours as long as it is small and/or located in
a certain area and/or trades in a very restricted set of
goods or services.
Reform of the taxi industry to encourage greater
flexibility, and allowing supply to match growth in
demand, is important. This requires greater capacity for
new entrants into the taxi market and reduced barriers
to entry, both regulatory and economic.
WA simply has too many local governments, which leads
to inherent difficulties for industry. This overabundance
of councils, each with their own proliferation of town
planning schemes and other associated regulations, acts
as a substantial barrier to development and business
innovation.
For Perth to establish itself as a significant city, a critical
component of that is ensuring the provision of adequate
social and economic infrastructure. While progress is
being made on a number of key infrastructure projectsin WA, including the upgrade of Perth airport, the
western foreshore development and Northbridge Link,
there are others that remain non-committed, including
a modern multi-purpose outdoor stadium. In addition,
the attraction and retention of public and private events
and festivals can add significantly to the vibrancy of
Perth and regional areas.
Liveability refers to the existence of basic conditions
that constitute a sustainable community and are expected
in an industrialised nation such as Australia. The major
issue confronting regional WA is not vibrancy, but
having sufficient access to infrastructure and services
to establish sustainable, liveable communities.
The significant economic expansion in regional WA
is placing severe strains on local communities. The
consequence is a generalised break down in services.
With many non metropolitan local governments
unable to maintain their infrastructure at current
levels, they are unable to maintain existing physical
and social infrastructure, let alone provide what their
rapidly expanding communities require. If regional
communities are to realise their potential, they willrequire assistance from state and federal government.
Raising Workforce Participation
Although the strength of the WA economy and the
employment opportunities which have been created
in recent times have provided the incentive for many
people to enter the workforce, Australias participation
rates still remain relatively low compared to other
OECD nations.
In particular, participation rates are relatively low
among specific sectors of the community, including
prime aged males, women (particularly of child-bearing
age), and people nearing retirement.
As a result, increased workforce participation is an
important strategy to boost human capital, and ensure
the states future labour needs are met. The Productivity
Commission has estimated that if Australia closed the
participation gap with the highest ranking comparable
OECD country for each of these labour market
segments, this would boost participation nationally by
around 600,000 additional people.4
Raising the participation rate could play an important
role in ensuring that WA has the workforce that it needs.
However, raising the states participation rate alone will
not be sufficient to meet the states future labour force
needs. In this regard, raising workforce participation
is just part of an overall strategy to boost the states
labour force.
Recommendations
The Government and business community should
look to implement strategies that will raise the level of
workforce participation, particularly among sectors of
the community that are underrepresented in the labour
force.
Key strategies to boost workforce participation
include:
personal income tax reform is critical to improving
workforce participation. Key reforms include
increases to the tax free threshold, a flattening of
the scales and the longer term reduction of the top
marginal tax rate to align with the company tax
rate;
addressing effective marginal tax rates to maximise
the incentives to move from income support
payments to increased participation in paid
work;
Chart 7
Median House Price, December 2009Selected Regional Centres, in $'000s
$300 $400 $500 $600 $700 $800
Karratha
Broome
Port Hedland
Bunbury
Albany
Perth
Esperance
Geraldton
Kalgoorlie
York
Carnarvon
Mandurah
Source: CCI
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implementing programs aimed at facilitating
greater mobility between states and within states;
introducing greater innovation in the education
system, including through reforms to funding
arrangements which are based on improving
outcomes rather than following processes.
There are also targeted policy options to increase
participation among sectors of the community that
are underrepresented in the labour force, particularly
women, people with disability, Indigenous Australians,
and older aged workers. These options are outlined in
the following sections.
Background
Increasing the level of workforce participation will go
some way to addressing labour shortages in WA.
One of the key ways to boost participation rates is
to improve the incentives to work and remove the
disincentives to work. Broadly speaking, the key policies
which influence workforce participation are taxation,
welfare assistance, and education and training.
There are a number of reforms that will be necessary
in order to ensure Australias taxation system remains
internationally competitive and encourages greater
labour force participation.
Personal income tax reform is critical to improving
workforce participation. Key reforms include increases
to the tax free threshold, a flattening of the scales and
the longer term reduction of the top marginal tax rate
to align with the company tax rate. Potential reform
options for personal income tax are outlined in the
Henry Review of Australias tax and transfer system.
Such reform would ensure that the nations income tax
system does not act as a disincentive to people moving
to Australia to take up job opportunities, nor result inan increasing flow of people from Australia to other
countries with more generous taxation regimes.
Addressing high effective marginal tax rates (EMTR)
is also important to enhance workforce engagement.
A high EMTR can mean that, looking at financial
benefits alone, for some it is simply not worth entering
the workforce, or working longer hours because the
combination of their loss of benefit and/or greater
income tax liability diminishes the increase in income
they receive from an increase in earnings.
The recently released Henry Review into Australias
taxation system focussed considerable research and
analysis into reforms to the tax and transfer system,
which ensure that there are appropriate incentives
for workforce participation and skills formation. This
significant body of research should form the basis of
any reform to the tax and transfer system.
Further investigation should also be undertaken to
determine ways in which certain forms of government
assistance can be modified to actively assist and
encourage people to migrate to and take up jobs in areas
where labour shortages are particularly pronounced.
This should involve assistance through the taxation
system to encourage labour mobility between states
and within states, and encourage people to migrate to
and take up jobs in areas where labour shortages areparticularly pronounced.
Education is also a key area where both the
Commonwealth and State Governments should focus
to improve workforce participation.
Governments should work to implement programs
which aim to improve the educational attainment of
specific segments of the workforce, including older
workers, the long term unemployed, people with
disabilities, and indigenous Australians.
Educational attainment will also be enhanced by
introducing greater innovation into the education system,
including through reforms to funding arrangements
which are based on improving outcomes rather than
following processes.
There also needs to be greater involvement and
engagement by government in developing vocational
education and training courses that meet business needs.
Programs should result in formal qualifications, involve
local businesses to ensure the skills are relevant, be of
sufficient intensity to develop valuable skills, and becompetency based.
Women
Recommendations
There are a range of policy options which could facilitate
greater labour force participation among women.
In addition to the aforementioned options to increase
overall workforce participation, there are a number of
targeted measures that would allow for greater female
participation in the workforce.
In particular, the Government should look to:
allow child care to be salary sacrificed, in the
same way that is allowed for motor vehicles,
superannuation and computers;
introduce ongoing training initiatives that which
will assist with re-skilling workers that have
previously exited the workforce.
However, the business community also has a key role to
play in ensuring that it is responsive to a changing labour
market. In this regard, businesses should look to:
introduce flexible working arrangements where
possible, such as flexible hours, part time options,
and job share arrangements; and
implement policies to address pay disparities
between genders where appropriate.
Background
While female labour force participation rates in WA
and across Australia have already risen considerably
over time, (particularly among women between 45 and
64 years of age), they still remain lower than for males.
At the same time, labour force participation among
women in WA and across Australia also falls below that
of many other developed nations.If labour force participation among females in WA were
to increase to the average of the 10 OECD countries
whose female participation rates are higher, this would
lead to over 119,000 additional females being employed
or looking for work in the state. 5
However, in order to achieve such an increase, there
are a range of barriers to female participation which
need to be addressed. A survey conducted by CCI
in October 2008 revealed that these barriers include
balancing work and family commitments, outdated
skills and a lack of confidence in their own abilities
(see Box 2).6
Box 2: Female Perceptions of Barriers
to Employment
In 2008, CCI conducted a survey of female
workers to gain a clearer understanding of issues
surrounding female workforce participation. A key
issue canvassed by the survey was in relation to
females exiting the workforce, and the barriers
which they faced upon their return.
The survey found that nearly half of respondents
had left the workforce at some stage in their career.
The most common reason was to care for children,
although other reasons cited included travel, or
further study.
Of those women which had exited the workforce,
the majority had not returned to the same
occupation. Nonetheless, most felt that they werestill in a position where their true skills and abilities
are being fully utilised.
The main reason that women chose to return to the
workforce was due to financial pressure. However,
other women returned to work because they were
looking for new challenges, or career opportunities.
Balancing work and family life is a considerable
barrier to women participating in the labour force,
with the return to work for many women limited by
caring for children. A lack of training, qualifications
and experience, and inadequate salary and
compensation was also a key issue for many
women.
When asked about the single greatest obstacle
faced in the return to work, balancing professional
and family life, managing childcare, regaining
confidence, and updating skills were the main
issues identified.
Chart 8
Measures to Attract Female Staff
% of Respondents
10 % 2 0 % 3 0 % 4 0 % 5 0% 6 0% 7 0% 80 % 90 %
Flexible Hours
Comparable Pay
Career Development
Training
Paid Maternity Leave
Affordable Childcare
Accessible Childcare
Salary Sacrifice of Childcare
Work From home
Accessible Parking
Unpaid Maternity Leave
Source: CCI
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Building Western Australias Workforce for Tomorrow
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Building Western Australias Workforce for Tomorrow
International experience has revealed that the policies
implemented to address these barriers have a significant
effect on female labour force participation. Many of the
developed countries with a higher female participation
rate than Australia offer a range of incentives, such as
cash benefits, leave provisions and childcare to improve
gender balance in the workforce.
There are a range of strategies which could be used to
boost the overall level of female workforce participation
in WA and across Australia. While some of these, such
as taxation and welfare schemes would be effective
in boosting the participation rate for both males and
females, there are a range of more gender specific
options which could prove effective in increasing the
female participation rate in WA and across Australia.
Flexibility in the workplace has consistently been
identified as the single most important measure to
attract and retain female workers (Chart 8). Flexible
arrangements would provide employees with more
options as to when and how they complete their work,
and provide greater opportunities for women to balance
work and family responsibilities.
In this regard, the business community has a key role
to play in adapting to the evolving labour market, and
ensure that options such as part time roles, flexible
hours, job sharing, and alternative leave arrangements
are available.
Policies used by employers to address pay disparities
may also increase the potential supply of labour.
The Government also has an important role to play in
boosting female workforce participation.
The Government can play a role in terms of ensuring
affordable and accessible childcare, which is critical to
allow working parents to balance their work and family
commitments.
While both the Child Care Benefit and Child Care
Tax Rebate are important ways that the Government
can assist with the cost of childcare, changes to salary
sacrifice options are also necessary. The Government
should allow child care to be salary sacrificed in the
same way permitted for motor vehicles, superannuation
and computers. It would also address the disparity
whereby childcare facilities provided on an employers
premises are exempt from Fringe Benefits Tax (FBT),
but a broader FBT exemption for employees is not.
Given that there is significant evidence to suggest that
a paid parental leave scheme will benefit business
through improved retention rates, CCI supports
the implementation of a government funded and
administered scheme of paid parental leave.
Education and training also has an important role to play
in boosting workforce participation among females.
Life-cycle learning that facilitates the retention of skills
and enables the retraining of older women will facilitate
greater female participation and engagement with
the labour market. These programs should be held at
convenient times, result in formal qualifications, involve
local businesses to ensure the skills are relevant, and be
of sufficient intensity to develop valuable skills.
People with Disability
Recommendations
Further investment is needed in targeted measures
which improve workforce participation among people
with disability. In particular, focus should be on:
engaging employers to increase apprenticeship
placement opportunities for people with
disability;
services to assist people with disability transition
from education to employment;
ensuring that skills development for people
with a disability is aligned with labour market
requirements;
ongoing employer education about hiring workers
with disabilities.
Background
Despite targeted policy measures to improve educational
and employment opportunities and outcomes over the
past three decades, people with disabilities continue to
be underrepresented in the labour force.
The participation rate for working age Australians
with a disability is just 53 per cent, compared with
81 per cent for people with no reported disability. At
any given time there are at least 4,000 to 6,000 people
with a disability nationally who are ready for work
and are on an employment service program with the
Commonwealth Rehabilitation Service (CRS).
People with a disability face significant barriers
to workforce participation. The main barriers to
employment have been identified by the Human Rights
and Equal Opportunity Commission as employer
concerns about the potential financial and other risks
associated with employing a person with disability as
well as the possible costs, and an absence of easily
accessible and comprehensive information and advice
to assist employers. However, these concerns about
financial and other risks associated with employing
people with disabilities are largely unfounded.
A number of specific areas have been identified
which will assist in